Marvin Goodfriend says markets undeservedly overconfident in Fed in 2005

It was a major mistake of the Fed. It gave markets a sense that the Fed was on top of everything to a degree that wasn’t the case. It gave the impression that this was a mechanical adjustment to normality. The market was overconfident.

~Marvin Goodfriend, professor, Carnegie Mellon University, on attending Richmond Fed meetings in 2005, "Fed Officials Saw Housing Bubble in 2005, Didn't Alter Policy" Bloomberg.com, January 14, 2011